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Beware the Pendulum Swing to Decentralization

October 03, 2014 | By Jay Gaines

Virtually every organization SiriusDecisions works with is urgently moving toward greater customer- and buyer-centricity in how it operates and goes to market. This is a good thing. When done properly, it drives many positive outcomes, including ...

Virtually every organization SiriusDecisions works with is urgently moving toward greater customer- and buyer-centricity in how it operates and goes to market. This is a good thing. When done properly, it drives many positive outcomes, including:Beware the Pendulum

  • Best-in-class buyer and customer experiences
  • Improved customer loyalty, retention and advocacy
  • The ability to better engage target audiences
  • Greater go-to-market focus – from campaign themes to content creation to tactic selection
  • Stronger alignment across sales, marketing and product management
  • Improved sales productivity

That’s a pretty sweet list of benefits, but of course, the trick is to do it properly.

Unfortunately, when attempting to go to market using a more buyer- and customer-centric approach, some companies have concluded that total, or near-total, decentralization of marketing is the answer. This typically means dissolving centralized and global functions (except communications functions), greatly increasing staffing and budget levels for field marketing (not always a bad thing), and altering reporting lines so that field marketers report to business unit, regional, or even local sales leaders.

On the surface, this may seem like a logical course of action. After all, local business leaders and salespeople are typically closest to buyers, and if marketing is taking direction from them, wouldn’t they automatically become more buyer- and customer-centric? Also, everybody has heard the anguished cries of local salespeople and field marketers who receive content, messaging and other assets from centralized marketing functions that simply don’t work in local markets.

Over the years, SiriusDecisions has observed companies that answer the siren song of decentralization, but end up on rocky shores characterized by:

  • Total loss of marketing efficiency and leverage
  • Sharp increases in redundant and wasteful marketing activity
  • Marketing that reverts to a function mostly focused on local events, designing pretty things and responding to every random sales request it gets
  • Inability to effectively measure marketing outcomes and business contribution
  • Loss of cohesive processes for continuous learning and improvement
  • Dilution of marketing expertise in key areas (e.g. nurturing, lead scoring, inbound marketing, analytics, content strategy)
  • Multiple disjointed campaign themes
  • Inability to plan, build and run integrated programs, which means less buyer-and customer-centricity

Only by blending balanced organizational design, strong process and properly developed personas can marketing truly enable and drive buyer- and customer-centric go-to-market strategies that actually work.

Here are three ways to approach this goal through organizational design:

  • Create an ecosystem view of marketing that clearly defines and balances capabilities and responsibilities in the plan/build/run process at the global, regional and local levels. Decision criteria that will define the specifics of your ecosystem include geographic distribution of your business, the nature and complexity of your offerings and business divisions, sales distribution and models and vertical audience segments.
  • Next, identify opportunities to stand up hybrid structures (e.g. demand centers) that act as both shared service and center of excellence to bridge the gap between global and local needs. Highly effective marketing requires unique skill sets and cohesive processes that simply cannot be effectively developed in an overly distributed organization.
  • It’s not enough to build your organization and hope for the best. Be sure to adjust compensation, incentives, KPIs, and training for marketers at the global, regional and local levels. Those in central/global functions should be measured and compensated for enabling (not controlling!) regional and local marketers to operate effectively and efficiently. Regional marketers should have similar focus on enabling local activity, but should also be directed to properly engage around key processes (e.g. planning, persona development, content) with those at the central/global level. A significant portion of local marketers’ incentive compensation should be focused on ensuring they are properly providing regional and global marketers with local context and insight.

How is your organization structured?

Jay Gaines

Jay Gaines is Chief Marketing Officer and Research Fellow at SiriusDecisions. His experience includes team building and leadership, marketing strategy and planning, marketing budget and operations management, demand creation, sales and marketing alignment, business development, product development and management, interactive marketing/advertising, inbound marketing and social media. Follow Jay on Twitter @izjay.

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